Gold prices declined below $4,000 an ounce on Friday, extending recent losses as stronger US inflation figures and renewed tensions in the Middle East increased expectations of further interest rate increases by the Federal Reserve.

Interest rates, which impact borrowing costs and savings, were raised last month for the first time in three years.

Policymakers weigh whether to deliver back-to-back increases in effort to tame inflation exacerbated by Donald Trump’s war against Iran

The US economy continues to grow at a strong clip; however, fast-rising gas prices helped to lift inflation in September to a four-month high, new data showed Thursday.

The 12-month rate of inflation as of August 2026 is 3.7%, according to the Bureau of Labor Statistics (BLS). Energy inflation spiked to 20.4% as the status of the Strait of Hormuz remains uncertain. Core inflation, which excludes energy and food, was 2.6%.

For the rest of 2026, models from forecasting companies like Trading Economics anticipate an inflation rate of about 3.5% through the middle of the year. After that, it may decline to around 3%.

Odds of a rate hike by the Federal Reserve in December decreased slightly on Thursday after September's inflation rate was in line with expectations and the GDP grew at a robust pace, but still remains elevated.

US inflation accelerated in September as consumers paid more for gasoline and other goods, supporting economists' expectations of an interest rate increase from the Federal Reserve in December.